Nancy Pelosi holds some cards in debt-ceiling crisis

The outlines of a weak budget deal are clear. The two plans by House Speaker John Boehner, R-Ohio, and Senate majority leader Harry Reid, D-Nev. are nearly identical in terms of numbers. Both call for roughly $3 trillion in 10-year savings, including $1.2 trillion in defense and agency cuts. Both would postpone the hard and necessary decisions on taxes and entitlements and delegate them to a 12-member bipartisan commission of lawmakers, whose plan would be subject to an up-or-down vote by Congress in the future.

The White House has endorsed the Reid plan. The hitch is whether to enact this scheme in such a way as to provoke another debt-ceiling crisis during a presidential election year, as Boehner is insisting. President Obama would obviously prefer to avoid such a scenario.

Democrats have caved pretty hard, although they have managed to avoid for now any trims to out-of-control spending in Medicare. Republicans have sacrificed entitlement reform to their party’s right wing, which is obsessed with preserving corporate and individual tax preferences that make the tax code incoherent, unfair and incapabable of raising the revenue to necessary to support their own policies.

House minority leader Nancy Pelosi, D-San Francisco, holds significant leverage in all this because she has unified Democrats, whereas Boehner has not unified Republicans. It may be impossible to unify Republicans. Many GOP lawmakers, along with conservative advocacy groups, are saying the Boehner plan is not conservative enough and should be defeated. They are saying the U.S. does not have to default (we can prioritize interest payments to China and not pay other bills; they don’t seem to care about a credit downgrade). That means Boehner will need Democratic votes to pass anything out of the House.

Capitol Hill phone lines are being swamped with calls from constituents worried about their benefit checks, and possible ramifications of a credit downgrading on stock portfolios and interest rates.